"A Tale of Two Regimes"

FCC Commissioner Robert McDowell spoke at the Media Institute yesterday and expressed his wonderment that FCC Chairman Kevin Martin was embarking on a plan to loosen broadcast/print ownership while at the same time "laying the foundation for unprecedented regulation of the cable industry."

On the loosening of cross-ownership restrictions in the top 20 markets, he said broadcasters in smaller markets "…don’t seem too excited by the Chairman’s proposal." On the cable side, he questions the assertion that cable penetration suddenly reached a critical 70% benchmark (based on a just-as-sudden change in measurer and methodology), and that it lacks competition at a time with satellite video services are growing and telco entrants are closing in on 1M subscribers themselves. He said Nielsen and Kagan data pegs cable penetration at 60% and studies see it sinking from there — only the new Warren Communications numbers put the number at 70%.

He wondered about the implications of this abrupt shift on the cross-ownership proposal, as well as review of XM/Sirius. "How do we reconcile decades of data showing more convergence and more competition among more delivery platforms with this sudden reversal?"

On ownership, he noted that broadcasters have "prioritized…opposition to the XM-Sirius merger and the use of TV white spaces" to asking for less regulation, and suggests that their opponents have used this as a window of opportunity to impose more regulation on them. He said a Congressional presumption in favor of eliminating rules seems to have been lost in recent debate. He also noted the difficulty of tightroping the desire to increase minority/female ownership and surviving court challenge. Regarding the pace of the proceeding, he said, "…we are rushing toward a decision in media ownership the way a slug races across a garden," and later quoted an anonymous analyst who compared the process to "a runaway glacier."

RBR/TVBR observation: So it looks like Martin has a vote for his limited dereg unless McDowell objects that it doesn’t go far enough, and has a strong same-party skeptic when it comes to cable. It seems there is always room for more flies in this ointment.